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IN THE SUPREME COURT OF MISSISSIPPI
NO. 2015-CA-01719
JEFFREY JACK STROH APPELLANT VS. NANCY JANE ZEHR STROH APPELLEE
APPEAL FROM THE CHANCERY COURT OF RANKIN COUNTY, MISSISSIPPI
APPELLEE’S BRIEF
ORAL ARGUMENT NOT REQUESTED
Counsel to Appellee
T. Jackson Lyons
Lyons Law Firm
P.O. Box 4690
Jackson, Mississippi 39296
Tel. (601) 969-0731
Email appealsinms@bellsouth.net
MSB #8988
E-Filed Document Oct 14 2016 15:40:43 2015-CA-01719 Pages: 34
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IN THE SUPREME COURT OF MISSISSIPPI
NO. 2015-CA-01719
JEFFREY JACK STROH APPELLANT VS. NANCY JANE ZEHR STROH APPELLEE
CERTIFICATE OF INTERESTED PERSONS
The undersigned counsel of record certifies that the following listed persons
have an interest in the outcome of this case. These representations are made in order
that the justices of the Supreme Court and/or the judges of the Court of Appeals may
evaluate possible disqualification or recusal.
1. The Appellant Jeffrey Stroh (hereinafter, “Jeff” or “Mr. Stroh”) is an adult
resident citizen of Rankin County, Mississippi.
2. Mr. Stroh is represented by the firm Malouf & Malouf, PLLC, in the persons of
Mr. Michael Malouf and Mr. Robert Jones.
3. The Appellee Nancy Spence1 (“Nancy” or “Ms. Spence”) is an adult resident
citizen of Rankin County, Mississippi.
1 The former Mrs. Nancy Stroh was restored to her former last name of Spence at the conclusion of the chancery court’s final order. [V. 1: C.P. 101]
3
4. Ms. Spence was represented by Mr. Mark Chinn before the chancery court and
she is represented here by Mr. T. Jackson Lyons.
5. It apparently having become a policy of the Clerk’s Office to reject briefs that
fail to include trial court judges as “interested persons,” this case was presided over by
the Hon. John S. Grant.
/s T. Jackson Lyons
4
TABLE OF CONTENTS
CERTIFICATE OF INTERESTED PERSONS ....................................................... 2
TABLE OF CONTENTS ................................................................................................. 4
TABLE OF AUTHORITIES ........................................................................................... 6
STATEMENT OF ISSUES .............................................................................................. 7
STATEMENT OF ASSIGNMENT ............................................................................... 7
STATEMENT REGARDING ORAL ARGUMENT ............................................... 7
STATEMENT OF THE CASE ...................................................................................... 7
SUMMARY OF THE ARGUMENT ............................................................................. 8
ARGUMENT...................................................................................................................... 11
I. The Chancellor did not err in construing the Parties’ agreement to proceed
to an irreconcilable differences divorce or their testimony regarding their
desires that each retain the ownership and use of their respective homes. ...... 11
Standard of Review ............................................................................................................ 11
The Parties’ joint motion, stipulation, and testimony regarding their agreement
to each retain the Party’s own residence. .................................................................... 12
II. The Chancellor did not err in ruling that “the Hill” was marital property
where it was shown that Nancy made material contributions to Jeff’s
businesses and home life. ................................................................................................ 18
Jeff fails to show how Judge Grant abused his discretion or committed
manifest error in dividing the value of the real property equally .......................... 23
III. The chancellor was presented with valuations of the Hill from the Parties
that were each faulty, as acknowledged by the sole professional appraiser to
testify to the property’s value, and committed no error in choosing a value
between the Parties’ numbers. ....................................................................................... 25
IV. The chancellor did not err in recognizing the Parties had produced little
evidence regarding the value of a 33-foot sailboat and subsequently ordering
Jeff Stroh to value the boat and make an offer based on that valuation to
Nancy Spence for her interest. ....................................................................................... 27
V. The award of permanent alimony, and its amount, was not error since
there were insufficient marital assets to be equitably divided, leaving alimony
as the appropriate remedy. .............................................................................................. 29
5
VI. Conclusion ................................................................................................................ 32
CERTIFICATE OF FILING AND SERVICE ......................................................... 34
6
TABLE OF AUTHORITIES
Cases:
Armstrong v. Armstrong, 618 So.2d 1278 (Miss. 1993) ........................................................ 29
Cheatham v. Cheatham, 537 So.2d 435 (Miss. 1988) ............................................................ 29
Ferguson v. Ferguson, 639 So.2d 921, 928 (Miss. 1994)(en banc) .......................................... 22
George v. George, 22 So.3d 424, 427 ¶ 4 (Miss.App. 2009), citing Lofton v. Lofton, 924 So.2d
596, 599 ¶ 12 (Miss.App. 2006) ....................................................................................... 29
Gregg v. Gregg, 31 So.3d 1277, 1280-81 ¶¶ 9-13 (Miss.App. 2010) .................................. 15
Gutierrez v. Gutierrez, 153 So.3d 703, 709-710 ¶ 18 (Miss. 2014)(en banc) ....................... 26
Haney v. Haney, 907 So.2d 948, 952(¶ 16) (Miss.2005) ..................................................... 28
Hemsley v. Hemsley, 639 So.2d 909, 915 (Miss. 1994)(en banc) ........................................... 18
Parker v. Parker, 929 So.2d 940, 943 ¶ 8 (Miss.App. 2005) .............................................. 11
Pursue Energy Corp. v. Perkins, 558 So.2d 349, 351-53 (Miss. 1990) ................................. 12
Royer Homes of Mississippi, Inc. v. Chandeleur Homes, Inc., 857 So.2d 748, 751-53 ¶¶ 7-11
(Miss. 2003)(en banc) .......................................................................................................... 13
Sanderson v. Sanderson, 170 So.3d 430, 437-38 ¶ 25 (Miss. 2014)(en banc) ........................ 17
Stewart v. Stewart, 864 So.2d 934 (Miss. 2003) .................................................................... 23
Rules, Statutes, Other Authorities:
Rule 3.7, M.R.Prof.Cond ..................................................................................................... 14
7
STATEMENT OF ISSUES
Mr. Stroh states five issues he wishes the Court to consider. Each of the issues
will be addressed herein in the same order as the Appellant’s Principal Brief.
STATEMENT OF ASSIGNMENT
The Parties agree that nothing in Rule 16(b) or (d), M.R.A.P., would indicate
that the Supreme Court should do other than assign or retain the case at its discretion
in the ordinary course of business.
STATEMENT REGARDING ORAL ARGUMENT
Ms. Spence is unaware of any novel, unique, widely-important, or issues of first
impression that might justify the Court’s investment in oral argument. As is often the
case, the problems with Mr. Stroh’s appeal begin and fairly-well end with the standard
of review. Oral argument would be unlikely to facilitate the Court’s work.
STATEMENT OF THE CASE
While one-sided and ignorant of the factual standard of review, Jeff’s statement
of the case adequately provides the Court a reasonably concise understanding of how
the case proceeded. The general gist of the facts emerges from Jeff’s Principal Brief at
1-7. To wit, before meeting each other Nancy and Jeff both had long marriages, each
with two children, that ended in divorce. Nancy suffered a traumatic neurological
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injury in a skating accident during her earlier marriage and so became totally disabled.
Jeff had two businesses: a sign-making entity and a storage building business. Jeff’s
stated issues revolve around property acquired during the marriage and whether
periodic alimony is best under the circumstances of the case.
Instead of competing fact statements, Nancy will provide the correct facts,
supporting the chancellor’s rulings, and as needed for an assessment of Jeff’s issues,
infra. Nancy would commend Jeff’s Exhibit P-2, an aerial photograph on foam core
board, to the Court as particularly useful in understanding the geography of Jeff’s
businesses, house, and his mother’s home. At nearly two by three feet, it is a little
bulky, but comprehensive in allowing a viewer a quick study of the area.
Also, for what it is worth, this is not an appeal where the Court must struggle
with the lawyers’ work. For the most part, Mssrs. Malouf and Jones capably – and
briefly – present their client’s concerns. It is somewhat refreshing to be able to say,
save for some quibbles like an overuse of the word “clearly” which nearly always gives
the game away when used in argument, that Jeff’s brief is well-written.
SUMMARY OF THE ARGUMENT
Jeff argues that he was entitled to an assessment of the financial amount of his
contribution to the marital domicile. His argument fails for two reasons. First, the
Parties stipulated in a Joint Motion that each Party’s home was not to be considered
in equitable division. Jeff attempts to use his own lawyer’s speech to the chancellor as
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extrinsic evidence that the Parties’ agreement meant something other than what it
says: each Party was to retain the full ownership and use of the Party’s home.
The second reason the argument fails is that Jeff offered no evidence to show any
increase in the value of the home having occurred between the time the home was
Nancy’s separate property and as marital property at the end of the marriage. Only the
increase in value would have been “marital” property subject to division.
Next Jeff argues that a parcel of real property was not marital property, or if it
was, then an equal division is, in this instance, not an “equitable” one. Jeff’s
arguments founder on the most basic aspect of equitable division: property acquired
during a marriage is marital property unless the party claiming it is not marital shows
that the purchase price was entirely paid from non-marital sources. This, Jeff is unable
to do. Nancy was instrumental in assisting Jeff in his business by handling it’s
“business”: banking, accounts payable and receivable, bookkeeping, and other basic
office work like filing. She also created the method by which the business could pay
off its outstanding debt within a shorter span of time. Nancy also took care of all the
ordinary daily matters: groceries, house-cleaning, errands, and the like. The chancellor
was unable to overlook Nancy’s material contributions to their lives together. Jeff’s
alternative argument, that “equal” is not “equitable” under these circumstances, fails
because he cannot point to his proof of any quantum less than equal that would be
equitable.
10
The same parcel is believed, by Jeff, to have been incorrectly valued. The
chancellor had evidence from a licensed appraiser and Jeff’s lay opinion. Judge Grant
found that both amounts were qualified by the unique facts relating to the parcel and
ruled that he would value the real property at the average of the numbers offered by
the Parties. Nothing prevented Jeff from seeking his own professional appraisal, save
for the obvious reason why he would not want to do so.
Jeff’s fourth argument concerns a sailboat. This is one of those issues that
divorcing couples foist onto chancery, here only to have it returned to them by Judge
Grant when the Parties failed to provide him sufficient information with which to
value the boat. The chancellor crafted an order leaving Jeff in charge of the valuation
of the boat. He was to provide Nancy an offer to buy her interest, and if she did not,
then Nancy was to buy Jeff’s interest for the same sum. Jeff complains that the trial
court failed to consider the outstanding debt on the boat.
This assertion is factually incorrect. Judge Grant pushed the boat’s valuation
back on the Parties. There is nothing in the final judgment that would preclude Jeff
from valuing the boat in light of its debt, and making the offer to Nancy. Indeed, the
only reasonable conclusion to be drawn from the final judgment is that the chancellor
was ordering Jeff to do so. John Grant appears to have been admirably sneaky in this
clever manipulation. Also, if the Parties had some problem with this part of the ruling
after attempting to abide by it then they could always come back to court to seek
enforcement or modification. This “issue” is either non-existent or premature.
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The final argument asks the Court to evaluate whether Nancy should receive a
relatively small sum – $750.00 per month – of permanent alimony. Somewhat
unusually, Jeff concedes that some type of alimony is required under the facts of this
case. His preferred form of alimony is lump sum. However, the chancellor was
correct that lump sum alimony is not available here because there is no marital
“lump.” In this case it was the chancellor’s view that lump sum alimony would be
inequitable because Nancy had made no sacrifices in her career for Jeff, nor had she
materially contributed to Jeff’s acquisition of the storage company real property, the
majority of its buildings, or establishment of its business. A chancellor does not err in
choosing one form of alimony over another under these circumstances.
ARGUMENT
I. The Chancellor did not err in construing the Parties’ agreement to
proceed to an irreconcilable differences divorce or their testimony
regarding their desires that each retain the ownership and use of their
respective homes.
Standard of Review
The Court reviews the determinations of chancery courts with deference and
will not reverse such decisions when based on substantial evidence, even if the Court
or its members believe the Court may have decided differently if they were in the
position of the trial judge. A Mississippi appellate court will only reverse a chancellor
for manifest error in the determination of facts, abuse of the chancery court’s wide
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ambit of discretion, or the application of an erroneous legal standard. For all of which,
see e.g., Parker v. Parker, 929 So.2d 940, 943 ¶ 8 (Miss.App. 2005).
The Parties’ joint motion, stipulation, and testimony regarding their
agreement to each retain the Party’s own residence. Jeff is correct in stating that, since Mississippi became an equitable division
state, the chancellor must first identify the nature of the property as marital or not,
attempt to value the property, and then equitably divide it. There is nothing in
Mississippi law, however, that precludes parties from agreeing between themselves
that whether a particular item of property is marital or not, that it shall not be subject
to equitable division.
The Parties’ stipulation to divorce on the grounds of irreconcilable differences
was titled “Joint Motion and Consent to Trial and Divorce on the Ground of
Irreconcilable Differences” and may be found in the Clerk’s Papers at 75-77. The
single issue the Parties agreed upon was: “Each [P]arty may retain use and ownership
of their respective homes.” [V. 1: C.P. 76] Among the issues on which the Parties
could not agree and which would be decided by the court was the “[d]etermination of
marital assets and the equitable distribution of all assets of the marriage.” [V. 1: C.P.
76; emphasis in original]
In construing the Parties agreement, Judge Grant believed that he was to value
and divide all marital assets, except for each Party’s home. In his ruling, Judge Grant
simply noted that Nancy’s home – originally her separate property – was converted to
13
marital property through use as the marital domicile and due to Jeff’s uncontested
work to maintain the home. However, “it will not be subject to equitable division due
to the agreement of the [P]arties.” [V. 1: C.P. 85]
Both Parties testified that they desired for each residence to be, as Nancy put it,
“just [taken] out of the picture. He has his home, I have my home.” V. 4: T. 303] Jeff
said much the same. He was asked by his counsel, “[Y]ou’re not asking for her house
there?” A. “No, that’s hers (sic).” . . . Q. “You want her to have that completely?” A.
“Yes, that’s hers, that’s where she has been her whole life.” Q. “You’re asking the
same thing for your property?” A. “Correct.” [V. 2: T. 69]
So far as this concerns a fact finding, the Chancellor was obviously correct that
the Parties wanted each residence left alone. As a matter of construing the Parties’
agreement, for obvious reasons all written public and private law – whether statute,
deed, and all manner of contracts and stipulations – is interpreted similarly. At least
since the famous Perkins2 case, Mississippi courts have used a three-tiered analysis.
First, known as the “four corners” test, the language of the entire instrument is
examined. If it is clear and unambiguous, then it is applied as written. Second, if and
only if the document is ambiguous – subject, that is, to more than one reasonable
interpretation – then historical understanding and wisdom is applied in the form of
various “canons of construction.” If applying these ancient guidelines is unavailing,
2 Pursue Energy Corp. v. Perkins, 558 So.2d 349, 351-53 (Miss. 1990).
14
then reference to extrinsic facts is made to determine the meaning of the agreement’s
terms, not to change them. See also, Royer Homes of Mississippi, Inc. v. Chandeleur Homes,
Inc., 857 So.2d 748, 751-53 ¶¶ 7-11 (Miss. 2003)(en banc).
Jeff’s argument looks only to the language in the agreement setting out the
issues to be decided by the trial court: determining marital assets, valuing them, and
dividing them. “Therefore,” Jeff somewhat grandly announces, “the Consent to Trial
clearly provided that each party’s respective homes would remain subject to equitable
distribution.” [Appellant’s Principal Brief at 11] Had the Parties not agreed that each
would retain the ownership and use of their own homes, Jeff would be correct.
The trial court construed the phrase “use and ownership” to mean that all the
value of the house owned by each party was excluded from equitable division.
“Marital property” is owned, in some measure, by both marriage partners. If one does
not “own” the full value of the property, then in this context the phrase “use and
ownership” becomes meaningless. The trial court committed no error in construing
the Parties’ joint stipulation and finding it unambiguous.
While insisting that the agreement is clear and unambiguous, Jeff tries to use
his lawyer’s remarks to the effect that the “agreement was that we weren’t going to
fight about who lives in whose house, just about the contribution they made to it.”
[Supp. Vol. 1: T. 5] The Parties were divorcing and each had a home; there was no
fight about “who lives in whose house” going on in this case.
15
Also, Jeff wishes to use extrinsic evidence – his lawyer’s assertions in open
court – to explain what the agreement meant. Circumstances can be imagined where
the lawyers having drawn up an agreement might have to testify about how an
agreement came to be worded; some form of mistake comes readily to mind. A lawyer
standing in front of a chancellor “testifying” about an agreement made for purposes
of irreconcilable differences divorce is far outside the scope of what lawyers may
“testify” about. See, Rule 3.7, M.R.Prof.Cond.3 Even if Jeff’s counsel could, within the
bounds of professional conduct rules, testify about the agreement, he would only be
able to do so if the agreement were ambiguous. But that is contrary to Jeff’s insistence
that the agreement was “clear.”
The “four corners” test requires that the entire agreement be read together. Jeff
is not entitled to separate out one provision relating to marital property without also
noticing the Parties’ express agreement that, to use Nancy’s phrase, the houses were
“out of the picture.” The chancellor committed no manifest error in his factual
determination, nor did he commit an error of law in construing the Parties’
agreement.
3 Lawyer as Witness (a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness except where: (1) the testimony relates to an uncontested issue; (2) the testimony relates to the nature and value of legal services rendered in the case; or (3) disqualification of the lawyer would work substantial hardship on the client.
16
Jeff’s argument about what value should be assigned to his putative “equitable
division” of the marital property in Nancy’s home is not clear because the argument
ignores a basic legal principle: where non-marital property is converted to marital
property, only the increase in value during the marriage is available for equitable
division. Gregg v. Gregg, 31 So.3d 1277, 1280-81 ¶¶ 9-13 (Miss.App. 2010)(former
husband’s home became marital property; no manifest error in awarding wife one-
third of the appreciated value).
Jeff is correct that, at the hearing on Jeff’s motion to reconsider, Judge Grant
did supply an alternative basis for his ruling. “[A]lthough I know they added a number
of things to [Nancy’s] home, like gas lanterns on the front porch . . . a patio . . .
reworking some of the interior spaces. I heard not one scintilla of evidence produced
to show in any way how that enhanced the market value of that property. Sure, he
contributed to [the property but] [a]t the same time, there is no way to calculate what
that sweat equity was worth, whether it made it more valuable, or whether it made it
less – or . . . what, if any, increase it afforded the property . . ..” [Supp. Vol. 1: T. 16-
17]
Unfortunately, it has to be said that Jeff was entirely allergic to real property
appraisers in developing the facts relating to Nancy’s home or their ownership of the
property known as “the Hill.” Jeff insists that he did quantify his contributions. He
claims that he paid Nancy’s mortgage during their marriage in the sum of nearly
17
$70,000.00. Jeff also claims other items, such as shutters, pool liners, and the like, cost
an additional $13,000.00. [Appellant’s Principal Brief at 12]
The point Judge Grant was attempting – and rather gently – to make is that it
was Jeff’s job, as plaintiff, to show the value of the home some eight years earlier
when the Parties married, and the value of the home at the time of divorce. Only
then, absent the Parties’ agreement, could the trial court realistically entertain an
equitable division of the increased value.
Jeff argues that Nancy “was awarded marital assets in the amount of $290,000,
comprised of the equity in Nancy’s house and one-half (½) of the value of The Hill.”
[Appellant’s Principal Brief at 12] Again, could he have shown the increase in value of
Nancy’s home during the marriage and not waived the issue, Jeff would only have
been entitled to a distribution of the increase. Nancy’s home was worth something
when the Parties married, not zero. The arithmetic cannot work out as Jeff argues in
his brief.
Finally, the Parties’ testimony, and Judge Grant’s twenty-page final order and
opinion, show that the trial court never found that Jeff actually paid Nancy’s
mortgage. During the hearing, Jeff repeatedly acknowledged that Nancy kept all the
books for the businesses, and kept their personal joint checking account. [V. 2: T. 58,
59, 60, 61] Jeff’s counsel asked, “Do you know how much, if any, of that money she
has put in, from her . . . separate account, into y’all’s joint account?” A. “I was not
really paying any attention. She was taking care of all the bills.” Q. So you don’t know
18
where the money came from?” A. “I have no idea. I trusted her totally.” [V. 2: T. 60-
61] If irony applies to this situation, it should be pointed out that this was direct
examination, not cross-examination.
During the hearing, Jeff never actually said that he paid Nancy’s mortgage.
Jeff’s lawyer asked, “[W]ho was paying the mortgage while y’all lived together?” Jeff
responded, “It came out of the joint checking account.” [V. 2: T. 56] For her part,
Nancy testified that she moved money from her separate account into their joint
account to pay for the mortgage and her daughter’s bills. [V. 3: T. 293, 297, 300-01]
Judge Grant made no errors of law or fact in concluding that Nancy’s home
was marital property but that no equitable division of it could be made based on both
the Parties’ agreement and, alternatively, the failure of proof of an increase in value
for equitable distribution.
II. The Chancellor did not err in ruling that “the Hill” was marital property
where it was shown that Nancy made material contributions to Jeff’s
businesses and home life.
Jeff correctly recites Mississippi law relating to marital property: all property
acquired by the marital partners during the marriage is presumed to be “marital”
unless the property was purchased by or exchanged for a separate and not familial
asset or function, for example a gift from a parent to a married adult child. Sanderson v.
Sanderson, 170 So.3d 430, 437-38 ¶ 25 (Miss. 2014)(en banc). The simple rationale is that
each marital partner, regardless of where the partner works or whether the partner is
19
paid, is presumed to make equivalent contributions to the marriage and its
accumulated property.
As the Supreme Court famously said in Hemsley v. Hemsley, 639 So.2d 909, 915
(Miss. 1994)(en banc), “We, today, recognize that marital partners can be equal
contributors whether or not they both are at work in the marketplace. [¶] We define
marital property for the purpose of divorce as being any and all property acquired or
accumulated during the marriage. Assets so acquired or accumulated during the
course of the marriage are marital assets and are subject to an equitable distribution by
the chancellor. We assume for divorce purposes that the contributions and efforts of
the marital partners, whether economic, domestic or otherwise are of equal value.”
As the dissents in both Hemsley and Ferguson illustrate, as hard as it is to imagine
the always handsomely turned out, but somewhat dowdy, Lenore Prather – and her
majority on the 1994 Supreme Court – as a revolutionary force, that is the simple
truth. Jeff, today, wants to turn back time. In support of his argument, he states that
his mother, Joyce Stroh, long had intended to either leave the parcel to Jeff in her will
or to sell it to him. [Appellant’s Principal Brief at 13] “Granny Stroh” died shortly
before the hearing and was unable to corroborate Jeff’s story. But that is largely
immaterial because it is beyond dispute that Mrs. Stroh allowed Jeff to place his
wastewater treatment plant on the parcel adjoining the Eldorado Road Commercial
Storage, LLC, property. Any “agreements to agree” between them would have been
unenforceable and, now, are simply a dead letter.
20
Jeff told the story about how the couple obtained title: “Right after we got
married . . . Nancy says, ‘Well, it’s time we go ahead and get that lot from your
mother.’ So . . . I talked to my mother . . . [who] sold it to me [for] what she had paid
for it.” [V. 2: T. 35] Jeff agreed to pay his mother $21,000.00, and estimated the lot’s
value today as between $30,000 to $32,000.00. [V. 2: T. 35] Jeff states that he paid
$5,000.00 down, with monthly payments of $300.00 until it was paid off – while there
is no mention of any interest paid to Mrs. Stroh, this meant that the purchase price
would have been paid off in less than four and a half years. In other words, entirely
during the course of the Parties’ marriage.
According to Jeff, Eldorado Road Commercial Storage, LLC, paid for the real
property. [V. 2: T. 36] The deed, dated February 22, 2012, from grantor Joyce Stroh
was to Jeff and Nancy, as joint tenants with rights of survivorship. [Ex. P-4] As Jeff
explained, “I was excited [to have the deed in both names] because I wanted to show
[Nancy] that I had a full-time commitment with her, and I wanted to continue with
the warehouse buildings and started other buildings and continue with my projects
because the sewage treatment plant was designed to take advantage and handle this . .
. when I built [the storage facility].” [V. 2: T. 36-37]
While the storage limited liability company is Jeff’s sole property, the income it
paid to Jeff was not as the income was indisputably used for family purposes. Five of
the seven buildings were complete and leased at the time the Parties married. The
final two buildings were completed after they married. Nancy loaned Jeff’s business
21
$20,000.00 to facilitate the completion of plumbing, wiring, ducts, and similar items.
[V. 2: T. 30-31] Jeff happily acknowledged that Nancy did the books and enjoyed
working with numbers while he did not. [V. 2: T. 58] Nancy created the filing system
for the office. [V. 2: T. 63]
Along similar lines, Nancy also handled the accounts receivable and payable;
Jeff acknowledged that Nancy was “[v]ery persistent” in handling receivables. [V. 2: T.
127-28] Nancy installed the capability for handling credit cards for payments,
occasionally ordered items for the business, and handled the leasing of the storage
rental buildings. Responding to a question about whether Nancy handled the lease
documentation because she was good at filing and he was not, Jeff said, “My exact
words.” [V. 2: T. 129]
When they married, Jeff had a large loan involving both his home and the
storage company real property. After interest rates declined, Nancy was instrumental
in refinancing the debt. [V. 2: T. 130] Jeff acknowledged that Nancy was good with
money, that he had great trust in her, and that she handled the leasing business in a
manner that was fair to the business and its customers. [V. 2: T. 130] In addition,
Nancy instituted a management fee that was paid to the lower income business, the
sign company, from the higher income business, the storage building company. [V. 2:
T. 130]
While not entirely clear from the Parties’ testimony, the idea seems to have
been to run most of the two businesses’ money through the sign company and in turn
22
treat that entity as one would a partnership, and take all the funds from that as
income. Even if, as the chancellor suspected [V. 1: C.P. 82], this arrangement made no
difference as a taxation matter, since both businesses were “see through” entities that
are not taxed at the entity level – one a limited liability company, the other a
Subchapter S corporation – it possibly did streamline the entire bookkeeping
operation.
The Parties also successfully exercised their First Amendment right in
petitioning their government, the City of Pearl, to recognize the light industrial nature
of the Eldorado Storage facility at the time Pearl annexed the area. Jeff’s brief’s claim
is larger than that made during testimony: “Jeff, as the owner of The Hill, was
responsible for having the property grandfathered in as commercial property, along
with the Eldorado Storage property.” [Appellant’s Principal Brief at 15] As noted
supra, Jeff was not the sole “owner” of the Hill.
Nor was he solely responsible for securing a commercial, C-3, zoning
designation. As he said, “So I went with . . . Nancy went and met with me, too, met
the mayor of Pearl. And a couple of times, they said they’re not interested, the
building department was not interested.” [V. 2: T. 50] Nancy corroborated Jeff’s story.
Although couching it in terms of the increased value of the Hill as now zoned, Nancy
acknowledged the growth in the area and its potential consequences to the Hill’s
value: “And Jeff knew that, too, that’s why he – we really stayed on top of it, just
going and meeting with everybody we could to get them to even make the proposal
23
[for a commercial zoning], because in the beginning, it was the doors were shut. [¶]
And I remember driving over there, and Jeff wanting to go in, and then he thought,
no, I’m not going to. For some reason, I said ‘Just go, just go in,’ and we did, we went
in, and it started to evolve over the next couple years to where they finally accepted us
[to be zoned at C-3].” [V. 3: T. 290]
Jeff also readily admitted that Nancy did all the basic home-making tasks:
laundry, cooking, cleaning, shopping, taking out the garbage, assisting with work in
the yard, errands, and, of course, their banking. [V. 2: T. 112]
Jeff, in testimony, had no problem acknowledging Nancy’s contributions to his
business and his life. The brief is a bit charier. The point for now is that Judge Grant
cannot be placed in error on the facts acknowledged by Jeff. They each contributed to
the marital partnership and the property was acquired through both their efforts.
Jeff fails to show how Judge Grant abused his discretion or committed
manifest error in dividing the value of the real property equally
While Judge Grant’s factual recitals are not without small error – he did not,
after all, have the advantage of the entire appellate record – he did accurately consider
all of these facts under the customary Ferguson factors.4 [V. 1: C.P. 92-96] Jeff’s
4 Ferguson v. Ferguson, 639 So.2d 921, 928 (Miss. 1994)(en banc)(guidelines are: substantial
contribution to accumulation of the property, directly or indirectly, and contribution to stability and
harmony of family; contribution to education bearing on earning capacity, spousal distributions or
waste, market value and emotional value of assets; value of non-marital assets; tax or other economic
consequences to parties and others of proposed division; extent to which a particular property division
24
argument that the Hill was not marital property does not in any particular find fault
with the chancellor’s consideration.
Instead of faulting the chancellor’s assessment of the Ferguson factors – which
one would have thought the means to illustrate the trial court’s abuse of discretion or
manifest error – Jeff cites a case for the proposition that the Supreme Court would
affirm a chancellor’s exercise of discretion in awarding a much lower percentage of
interest in real property. This argument seems to proceed on the basis that the cited
case, Stewart v. Stewart, 864 So.2d 934 (Miss. 2003), is analogous to this one.
In Stewart the parties were married about a year before separating. Their marital
domicile was destroyed by fire thereafter. There was no marital domicile’s value to
divide. The Supreme Court, speaking through former Chief Justice Jim Smith, said
only this: “The trial court completed analysis of the facts using the Ferguson factors.
Due to its consideration of the fact that John made a substantially larger monetary
contribution to the purchase of the home and the insurance, the trial court found a
property division of eighty percent to John and twenty percent to Lisa to be equitable.
The chancellor gave some weight to Lisa's help with improvements, payment of utility
and some food bills, and contribution to harmony of the home in declaring her
entitlement to twenty percent of the insurance proceeds and lot sale proceeds.” Id. at
939, ¶ 17.
may obviate permanent alimony or other potential future personal friction; parties’ need for financial
security with regard for each party’s assets, income and earning capacity)
25
The same may be said of the chancellor’s work in this case. Judge Grant’s four
and one-half page analysis of the facts relating to the Ferguson factors is
comprehensive. There is no obvious abuse of discretion or manifest error in the trial
court’s analysis. Jeff does not attempt to show any.
III. The chancellor was presented with valuations of the Hill from the Parties
that were each faulty, as acknowledged by the sole professional appraiser
to testify to the property’s value, and committed no error in choosing a
value between the Parties’ numbers.
Jeff does not improve his problems with the standard of review by resort to the
ad hominem: “the Chancellor averaged the value [of the Hill] given by Jeff of $32,000
and that given by Biggs, an incompetent appraiser, of $180,000.” [Appellant’s
Principal Brief at 15] Nancy hired a licensed commercial real property appraiser, Mr.
Barr Biggs, to appraise the Hill. His qualifications are unimpeachable and the trial
court recognized him as an expert in commercial real property appraisal. Jeff declined
to voir dire Mr. Biggs. [V. 3: T. 182-84]
After describing the ordinary course of appraisal, Biggs described how he
discounted the value of the Eldorado Storage property from a geographically
proximate property having sold for more. [V. 3: T. 187] Also, and somewhat
importantly, Biggs had been misinformed by City officials that the Eldorado Storage
and the Hill properties had City sewer service. [V. 3: T. 214] However, a greater
problem with valuation was, as Jeff put it after looking at Pearl’s zoning map, “[The
26
storage property and the Hill are] like a little island of commercial in a sea of
residential.” [V. 2: T. 51]
Biggs acknowledged that if there was no sewer service, then that could affect
the value. [V. 3: T. 205] He also admitted that being misinformed by City officials
meant that the appraisal was based, in part, on an inaccuracy. [V. 3: T. 206] Barr
valued the Hill, about two and a half acres of largely vacant and unimproved land, at
$180,000.00. [V. 3: T. 184]
As noted, Jeff’s opinion as owner was that the Hill was worth about
$32,000.00. Nancy, as co-owner, said she would be willing to buy Jeff’s half share for
$50,000.00. [V. 4: T. 413] Perhaps not surprisingly then, the chancellor took all of the
Parties’ numbers and assigned the Hill a value of $106,000.00. [V. 1: C.P. 89]
Even though Jeff failed to have the property professionally appraised, he insists
that the Court should consider his and Nancy’s ownership of the Hill as nothing more
than an inter vivos gift to him from his mother and, therefore, as his separate property.
[Appellant’s Principal Brief at 16] Had the property been given to him by his mother,
this would be true. The facts, however, are that Jeff and Nancy bought the land for
$21,000.00, are joint owners with rights of survivorship, and successfully petitioned to
have it zoned as commercial property.
Judge Grant had some rather pointed words for Jeff regarding real property
valuation: “A chancery judge has to evaluate property based on what he has before
him. . . . [The great discrepancy between the Parties’ valuations] could have been very
27
simply [addressed] by asking the Court to appoint an independent [Rule] 706 [M.R.E.]
expert, and then just accept that. . . . [T]he Supreme Court has reminded chancellors
on a number of occasions, if [the chancellor] can’t accurately calculate the value by
what is before [the court], [the chancellor has] to do the best you can with what
you’ve got.” See, e.g., Gutierrez v. Gutierrez, 153 So.3d 703, 709-710 ¶ 18 (Miss. 2014)(en
banc)(chancellor’s assessment of competing valuations not error when supported by
substantial credible evidence).
A chancellor cannot be placed in error when that judge does the best that can
be done with faulty valuations. Since Jeff has shown no material errors by the trial
court, Judge Grant’s valuation should be affirmed.
IV. The chancellor did not err in recognizing the Parties had produced little
evidence regarding the value of a 33-foot sailboat and subsequently
ordering Jeff Stroh to value the boat and make an offer based on that
valuation to Nancy Spence for her interest.
Jeff argues that Judge Grant “erred by failing to consider the debt owed on the
[sailboat] in [the court’s] equitable distribution of the marital assets.” [Appellant’s
Principal Brief at 17] Jeff correctly recites Mississippi law that “net assets” are
considered in the distribution of marital property. Jeff is incorrect that the chancellor
failed to take into account the debt outstanding.
Jeff accurately quotes the chancellor’s expression of frustration with the Parties
with respect to the evidence about the boat’s value. It is not disputed that they
purchased the boat on-line for $14,000.00. Also undisputed is that to pay for the boat,
28
upgrades to the boat such as GPS, and the expenses of the trip to pick it up and for
ten days traveling in the boat along the east coast, Jeff borrowed $17,000.00, and
Nancy took $9,000.00, from her money market account. [V. 4: T. 309, 310, 394]
There was some confusion over whether Jeff’s funds came from an unsecured
line of credit or from a home equity line of credit, but Nancy was certain that the
balance had been zero before the boat’s purchase. [V. 4: T. 393-94] As she said, “[W]e
don’t do that. We didn’t take out money from the credit line, this was like our first
time.” [V. 4: T. 394] Neither Party gave any detailed accounting of where the
$26,000.00, went, save generally that they bought the boat, went to Maryland to get it,
and then sailed for ten days, finally leaving it in North Carolina to be transported back
to Mississippi.
Because the Parties provided the trial court with little basis for valuing four
items of personal property, a small sailboat, the large sailboat, a motorcycle, and a golf
cart, the chancellor placed the responsibility of valuing the four items on the Parties.
Each was assigned two of the items. Each Party was to make the other a written offer
to purchase the other’s half interest in the item. If the offeree did not accept, then the
offeree was ordered to buy the offeror’s interest at the offered price. [V. 1: C.P. 91-92]
The trial court removed incentives to grossly inaccurately value any of the four
items by ordering that each make an offer to buy and, if not accepted, requiring the
non-accepting Party to buy at the same price. Not having seen this done before, the
29
undersigned officer commends this as a clever stratagem and, more than a little bit,
admirably sneaky.
The chancellor did not fail to deduct the debt. Under the order, that was Jeff’s
job. So far as the record reflects, Jeff has made no attempt to obey the court’s order
or to seek relief by way of a motion to enforce or to modify the final decree. The
Court should instruct Jeff to seek to obey the trial court’s order, and if for any reason
that cannot be accomplished, then his remedy is to seek relief, in the first instance,
before the trial court. An appeal is, at a minimum, premature.
V. The award of permanent alimony, and its amount, was not error since
there were insufficient marital assets to be equitably divided, leaving
alimony as the appropriate remedy.
Jeff’s preferred form of alimony is lump sum alimony. To be sure, one of the
unforeseen consequences of moving to equitable distribution in the 1990’s was the
confusion regarding lump sum alimony, property division, and other periodic forms
of alimony. The “new” remedy of equitable distribution seemed, at least in some
circumstances, confusingly similar to the old. See, e.g., Haney v. Haney, 907 So.2d 948,
952(¶ 16) (Miss.2005)(lump sum appearing to be means of dividing property under
guise of alimony).
The confusion did not end there. Lump sum alimony can be paid either in a
single sum, or periodically, thus potentially looking like rehabilitative alimony.
However, the type of alimony and its quantum are left to the chancellor’s sound
30
exercise of discretion. The “bottom line” here is that the decision of whether to award
alimony, and if so, in what amount, is left to the chancellor's discretion. George v.
George, 22 So.3d 424, 427 ¶ 4 (Miss.App. 2009), citing Lofton v. Lofton, 924 So.2d 596,
599 ¶ 12 (Miss.App. 2006).
Inevitably the circumstances of the case and of the parties guide the chancellor.
Judge Grant would likely not have abused his discretion in awarding lump sum
alimony. Equally certain, he did not abuse the authority of the court in awarding
permanent alimony. Nor does Jeff attempt to identify any facts the chancellor got
wrong under the Armstrong5 analysis.
By way of explanation of this failure to “run” the Armstrong factors to
demonstrate the chancellor’s error, Jeff asserts that the chancellor failed to consider all
the Cheatham6 factors. Jeff complains that the chancellor only considered one factor,
whether Nancy made a substantial contribution to Jeff’s accumulation of wealth. Jeff
either honestly or strategically misunderstands Judge Grant’s reasoning.
In discarding lump sum alimony, the trial court was not considering a “factor”
but stating the reason, in context, why the chancellor believed lump sum alimony
would be inequitable under the circumstances. This is what Judge Grant wrote:
“Typically, lump sum alimony is awarded in situations when a spouse quits working to
become a homemaker or substantially contributes to the business of the other spouse.
5 Armstrong v. Armstrong, 618 So.2d 1278 (Miss. 1993). 6Cheatham v. Cheatham, 537 So.2d 435 (Miss. 1988).
31
[citation omitted] Neither of those situations applies here. Nancy was 100% disabled
prior to marrying Jeff and was supporting herself and her daughter using her disability
payment and child support from her previous marriage. . . . Nancy also did not
substantially contribute to Jeff’s business . . . [He] had already built and grown the
business prior to his marriage to Nancy.” [V. 1: C.P. 97]
Nancy did not sacrifice a career to keep a home and children with Jeff, nor did
she sacrifice in order to put him through school or otherwise foster his career. Nancy
did facilitate Jeff’s business by loaning him $20,000.00, to complete the last two of the
storage company’s buildings. But the chancellor was correct: Nancy had no part in
Jeff’s acquisition of the real property or establishment of the business.
Somewhat perversely, Jeff even admits these facts in his argument for lump sum
alimony. [Appellant’s Principal Brief at 21] Jeff does mention certain facts relating to
awards of alimony [Appellant’s Principal Brief at 19-21], but a rehearsal of slanted
facts is not enough to put a chancellor in error.
Jeff argues, for the second time, that “Nancy received $290,000 for
her house and one-half (½) of the value of The Hill. In addition, Nancy has
additional savings and investments of $200,000. It is clear that the sum
awarded to Nancy through equitable distribution combined with her nonmarital
(sic) assets will adequately provide for her.” [Appellant’s Principal Brief at 21] As
noted supra, the entire value of the marital domicile was never marital property. Only
32
the increase in its value during their marriage was “marital.” Jeff’s failure of proof
means that no one will ever know whether the home increased in value and, if so, in
what amount. Jeff’s second thoughts about excluding the Parties’ homes from
distribution cannot justify, in any rational manner, that in this case lump sum alimony
must be preferred to permanent alimony.
Just as at trial, Jeff fails here to point to any fact falling within the discretion of
the trial court to consider in analyzing the Armstrong factors that would call Judge
Grant’s considered opinion into question. Merely disagreeing with the chancellor over
matters lodged within the trial court’s discretion is never grounds for this Court to
reverse, and equally provides no basis for a party to insist otherwise.
The Court should affirm in all respects Judge Grant’s thoughtful opinion and
judgment.
VI. Conclusion
The chancellor committed no error in acceding to the Parties’ wishes to leave
their respective homes alone. The valuation of the Hill was reasonable as was the
equitable division of the real property. Forcing the Parties to assign their own values
to four items of real property will either have the result of the Parties’ obeying the
order or returning to the trial court for relief. Finally, the choice of permanent
alimony was not an abuse of discretion. The Court should affirm the chancellor’s
order in all respects.
Respectfully submitted,
33
NANCY JANE SPENCE
By: /s T. Jackson Lyons
Counsel to Ms. Spence: T. Jackson Lyons Lyons Law Firm P.O. Box 4690 Jackson, Mississippi 39296 Tel. (601) 969-0731 Email appealsinms@bellsouth.net MSB #8988
34
CERTIFICATE OF FILING AND SERVICE
The undersigned counsel of record to Appellee hereby certifies that the
above and foregoing Appellee’s Brief has been filed with the Clerk of the Court by
electronic transmission via the MEC. Notice of the filing has been electronically
transmitted to Appellant’s counsel also via the MEC:
Michael Malouf; mike@malouflaw.com Robert Jones; robert@malouflaw.com In addition, a true and correct paper copy of the brief has been deposited into the United States mail, postage prepaid, to the trial court: Hon. John S. Grant P.O. Box 1437 Brandon, Mississippi 39043
SO CERTIFIED, this the 14th day of October, 2016. s/ T. Jackson Lyons MEC Registrant
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